The central and state governments along with the industry need to invest heavily in revitalising the rural sector if the Indian economy, shattered by the lockdown to control the Covid-19 pandemic, is to be nursed back to health in quick time. Sharing this conviction during an interaction with journalists in a virtual press conference recently, CII Northern Region Chairman Nikhil Sawhney said states especially should convert this disruptive phase into an opportunity to give a new thrust to their economies.
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“We have recommended to the seven states and three Union territories in the region to spend 10% of their Gross State Domestic Product (GSDP) as a stimulus package to give a big push to economic revival. For this, states need to monetise their assets, which could include divesting in some state PSUs, to improve their precarious fiscal health,” he said, while also advising states to shed their inhibitions and undertake bold and wide ranging reforms to mark a paradigm shift from ‘babu’ centric to market centric focus.
Elaborating on the rural sector, Sawhney, who is Managing Director, Triveni Engineering Ltd, said investment in rural health and infrastructure along with strengthening rural digital programmes and platforms could pave the way for a robust rural ecosystem. Industries along with state governments can be encouraged to set up facilities in rural areas, which in turn will generate jobs and strengthen the rural sector’s share in the country’s GDP.
In this context, he pointed out that the extended lockdown of the country had exposed the vulnerability of the agricultural and allied sector and its supply chains, which need to be strengthened without delay.
Emphasising that for an inclusive and sustained economic recovery, the government and bigger companies will have to play a greater role in protecting the MSMEs, which are a crucial supply chain for a robust economy, and enabling them to invest in research, innovation and technology, he said “whereas we would have wished that the stimulus announced by the government for the MSME sector was in the form of an outright grant, but given the fiscal constraints, the stimulus provided, for example in the form of 100% credit guarantee to MSMEs and various other measures, is commendable.
“More such measures will be needed in the future, but at the same time, the balance between fiscal spending and financial stability will have to be ensured,” he added.
He also forcefully advocated a similar stimulus for startups, which had also suffered a body blow on account of the lockdown.
Commenting on the growing countrywide chorus for boycotting China and Chinese goods following the bloody faceoff between troops from both sides on Ladhakh border triggered by unprovoked brutal assault by Chinese soldiers, Sawhney said through CII as an organisation stood committed to abide by the Indian government directives on the issue, in a globalised economy expecting individual private enterprises to toe this line may not be sustainable.
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At the same time, he said CII will work closely with the government to privide incentives and facilitation to companies wanting to voluntarily shirt their manufacturing operations out of China as part of their de-risking strategy.
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